Mumbai DP 2034: Right intentions marred by sloppy execution?

The scrapping of the error-riddled Mumbai DP-2034 has been a cause of major concern with regard to the future development of Mumbai, however industry stakeholders are optimistic that the reworked version will showcase the route to a better planned city, writes Rajesh Kulkarni.

It was perhaps the most embarrassing moment in the long history of the Municipal Corporation of Greater Mumbai (MCGM), when its much touted Mumbai Development Plan 2034 was ravaged by thousands of objections and heaps of ridicule, forcing the embarrassed state government to scrap it altogether and order a new one.

What went wrong?
Plenty, going by the over 50,000 objections the DP attracted. For starters, realty experts pointed towards the glaring errors in the land earmarked for use in development. Further the draft did not allocate space for public utilities, nor did it consider heritage structures while allotting land for the city’s development.

The DP was unclear about whether the densification measures would do any good for housing of low income groups and middle income groups in the city. Roads that did not exist also appeared miraculously on the map.

It also proposed the development of areas which are in no-development zones, environmentally sensitive zones and recreation zones. This not only reduces the per capita open space in the city but also poses questions about sustainability. Such fundamental errors in a document of great importance led to a hue and cry among the citizenry and experts with the result the DP had to be scrapped.

Gauging the impact
The delay caused by the scrapping of the original draft and the time taken to work on a new one is expected to negatively impact buyer sentiments at a time when the realty industry is already reeling from falling sales.
 
Mumbai already has a large supply of unsold inventory due to the wait-and-watch policy of buyers aided by high interest rates and less hope of property depreciation. Mumbai currently has the second highest unsold inventory at an estimated 6.8 lakh units, including the ones in the suburbs of Thane and Navi Mumbai.

The present lack of a DP for the nation’s financial capital is also likely to ensure that the market remains subdued till such time as the government comes up with a new DP for the city and gets it approved. In the present context the state government has asked the municipal authority to revise the draft within four months. However, this process could take much longer than expected.

Already the supply of new launches is drying up in the MMR, courtesy the sluggish market conditions. Mumbai’s residential property market witnessed around 18 percent decline in new project launches during the first half of 2015, states a report by property consultancy CBRE. Subdued demand levels and the presence of unsold inventory led to a slowdown in new project launches as against preceding half year ending December 2014.

According to the report, the Mumbai residential market witnessed a decline in supply addition and sales activity. The uncertainty surrounding the Development Plan (DP) 2034 for Greater Mumbai further contributed to subdued market sentiments. Even on the leasing front, markets remained largely stagnant with negligible rental revisions being witnessed across micro-markets during this review period, the report added.

According to industry data, new project launches in Mumbai city last year, fell by an estimated 40 percent. Navi Mumbai and Thane did not fare much better recording a fall of about 58 percent and 68 per cent respectively. Industry experts attribute this decline to the prevailing uncertainty on key policies governing floor space index (FSI) and land allocation for development.

Reputed developers acknowledge that they are keenly waiting for the government’s new policies that will form a part of the new DP to assess their impact on the industry, before they proceed with the launch of new projects.

Way forward
To begin with all the existing bloopers related to the land use map in the DP need to be put right, ensuring that the basis for the new DP is accurate and can be relied upon to give an accurate roadmap for the development of Mumbai for the next two decades. The upcoming DP should focus its attentions on open spaces, housing requirements, transport infrastructure and encourage affordable housing.

The decision to scrap the original DP with all its errors though unfortunate has sent the right message to developers on the government’s earnestness to set things right with regard to the urban development of this mega-city. However it remains to be seen whether these positive intentions are replicated as part of the new DP-2034 that all the stakeholders of the industry are now looking forward to in the hope of a new and better planned Mumbai.